Key barometers were trading near day's low in mid-afternoon trade. At 14:22 IST, the barometer index, the S&P BSE Sensex, was down 293.22 points or 0.80% at 36,232.92. The Nifty 50 index was down 78.20 points or 0.71% at 10,930.10. The Nifty was trading below the 11,000-level after sliding below that level in early trade. Pharmaceuticals shares traded higher.
Trading sentiment continued to be weak after the rupee dropped to a new low amid sustained foreign fund outflows and surging crude oil prices. Investors were also cautious ahead of the three-day Reserve Bank of India (RBI) policy review scheduled to begin Wednesday.
Among secondary barometers, the BSE Mid-Cap index was down 0.22%. The BSE Small-Cap index was up 1%.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1612 shares rose and 940 shares fell. A total of 142 shares were unchanged.
Most pharmaceuticals shares rose. Piramal Enterprises (up 4.82%), Wockhardt (up 4.04%), Strides Shasun (up 2.48%), Aurobindo Pharma (up 1.93%), GlaxoSmithKline Pharmaceuticals (up 1.46%), Lupin (up 1.46%), Cadila Healthcare (up 0.89%), Cipla (up 0.70%), Divi's Laboratories (up 0.59%), Dr Reddy's Laboratories (up 0.40%) and IPCA Laboratories (up 0.25%), edged higher. Sun Pharmaceutical Industries (down 0.37%), Alkem Laboratories (down 0.38%) and Glenmark Pharmaceuticals (down 1.14%), edged lower
Sugar shares were in demand. DCM Shriram Industries (up 11.74%), Dwarikesh Sugar Industries (up 9.83%), KCP Sugar & Industries Corporation (up 9.23%), Dhampur Sugar Mills (up 8.4%), Triveni Engineering & Industries (up 5.71%), Shree Renuka Sugar (up 4.98%), Balrampur Chini Mills (up 4.84%), Rana Sugars (up 4.83%), Sakthi Sugars (up 4.55%), Empee Sugars and Chemicals (up 4.35%), EID Parry (India) (up 1.51%) and Bajaj Hindusthan Sugar (up 0.21%), edged higher.
Car major Maruti Suzuki India was down 1.79%. The company today announced that it will proactively and voluntarily undertake a recall for Super Carry vehicles to inspect for a possible defect in fuel pump assembly. 640 vehicles in the domestic market manufactured between 20th Jan 2018 till 14th July 2018 will be covered in this recall campaign. Recall campaigns are undertaken globally to rectify faults that may be potential safety defects. Starting 3rd October 2018 owners of the vehicles included in this recall campaign will be contacted by Maruti Suzuki dealers for inspection and replacement of the faulty part free of cost.
In a separate announcement today, Maruti Suzuki said that its popular Eeco has crossed the milestone of 5 lakh sales. Designed to perform twin objectives of a being a brilliant family transport and a dependable business vehicle, Eeco has built a strong foothold across the country since its launch in January 2010.
In the global commodities markets, Brent for December 2018 settlement was up 40 cents at $85.20 a barrel. The contract had fallen 18 cents, or 0.21% to settle at $84.80 a barrel during the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 73.28, compared with its close of 72.91 during the previous trading session. Rupee hit a record low of 73.4175 against the dollar in early deals amid worries that surging oil prices will stoke inflationary pressures and widen India's current and trade deficits.
The RBI's Monetary Policy Committee (MPC) will meet between 3 to 5 October 2018 for the fourth bi-monthly monetary policy for 2018-2019. The resolution of the MPC will be unveiled at 14:30 pm on 5 October 2018.
Overseas, most European stocks rose on Wednesday as investors kept an eye on Italian politics and spending plans. Most Asia stocks declined. Markets in China and South Korea are closed for a public holiday.
Italy last week unveiled a 2019 budget deficit target that has met stiff opposition from European Union officials, who say it will violate the bloc's fiscal rules. Italy's coalition government proposed a budget that would increase the deficit to 2.4% of gross domestic output in 2019, well above the initial target of 0.8% proposed by the country's previous centre-left government. The current target range for this year is 1.6%. The deficit blowout revived fears of the eurozone debt crisis and put pressure on the euro.
Meanwhile in the UK, the Conservatives' annual party conference was under way with Prime Minister Theresa May facing pressure over her proposal for future UK-EU relations, known as the Chequers plan, which has already been rejected by EU leaders. Any additional signs of political instability in Europe could weigh on the US, where multinational firms have a large amount of revenue exposure to the region.
In US, the Dow Jones Industrial Average hit a record high on Tuesday as it rallied for a second day, boosted by gains in Intel and optimism around global trade. Stocks were coming off strong gains from the previous session after Canada joined the US and Mexico in a new trade deal. The United States-Mexico-Canada Agreement, or "USMCA" for short, will see all three countries compromise on certain trade aspects. More market access will be granted to US dairy farmers, while Canada has agreed to effectively cap automobile exports to the States.
Trade war remains in focus for the markets. Following the new USMCA deal to replace the current North American Free Trade Agreement, eyes are now on Washington's ongoing trade fight with China. Investors will be looking to China, to see if Beijing and Washington can compromise on certain trade elements.
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